New Trends in energy management 'disrupting FM sector'

DUBAI, December 12, 2018

On the back of rapidly evolving technologies and digital revolution across multiple industries, Facilities Management (FM) companies are now starting to go through a significant transformation to catch up with the new demands in the marketplace, said an expert.

Competing in the industry and maintaining significance without following industry megatrends is no longer an option for FM providers with traditional service portfolios, stated Frost & Sullivan’s Energy & Environment practice in a recent white paper.

Now, more than ever, it is essential for FM companies to advance towards integrating workplace management, smart technologies and energy management (EM) services into their offerings, it added.

Frost & Sullivan pointed out that energy management had emerged one of the fastest growing trends that was significantly disrupting the FM industry.

The top consultancy's white paper discusses the growing trends on EM, increasing demand for energy performance, forecasting of the contracting market in the GCC and growth opportunities.

"Companies that are offering traditional FM services are now under high risk of losing their business with the pure energy service providers," remarked Ana Sukhishvili, the senior consultant, Energy & Environment - Industrial Practice, Frost & Sullivan.

“They need to explore opportunities to become Integrated FM providers that will enable them to compete with the pure energy players in the building energy management market,” said Sukhishvili.

Some of the growth opportunities, she stated, for the integrated FM service providers include becoming energy service companies (Esco) accredited FM service providers; evaluating energy performance contracting business models and identifying the suitable ones and establishing partnerships with super Escos and financial institutions.

Integrated Facilities Management (IFM) companies have long realised the value-add of Energy Management (EM) services to their businesses, clients, and ultimately, the environment, she added.

While typical EM projects are predominantly delivered by Escos, FM service providers are now beginning to build capabilities to compete with them comprehensively, thus acquiring Esco accreditations globally.

Performance contracting for Facilities Management companies and Escos in the GCC remains in the early stages of development.

This is attributable to restraints such as access to financing, incomplete regulatory environment, and an overall lack of awareness. However, creation of Super Escos in the UAE and Saudi Arabia, in 2013 and 2017, respectively, has significantly eliminated entry barriers, especially in the UAE (given the longer presence of Etihad Esco in the market).

“A lot of developers and facility owners do not realize the importance of energy performance contracting. The question always is "How am I going to benefit from it?" and despite seeing the clear benefits of implementing energy efficiency measures, financing of the project becomes a challenge,” remarked Sukhishvili.

"Despite these challenges, there is a massive potential for Energy Management in the GCC. The as-built infrastructure that can benefit from retrofitting is significantly high, facilitated by being relatively new and adequately sophisticated," she stated.

FM companies play a vital role in this industry, and can derive significant gains as this market evolves, said Sukhishvili.

"However, it requires comprehensive planning and research, for a FM company to prepare to operate in this industry. Managing longevity of contracts, a shift from a services model to an asset-heavy model, and requirements for highly trained manpower are all aspects that will demand a redefinition of the way that FM companies are used to operating," she added.-TradeArabia News Service